US-listed fund pools $8.6 mln for Vietnam stocks

By Dat Nguyen March 2, 2022 | 06:04 am PT

Investors look at stock prices on a laptop at a brokerage in Ho Chi Minh City. Photo by VnExpress/Quynh Tran

An U.S.-listed exchange-traded fund has pooled $8.63 million over the last three months to invest in Vietnam stocks, seeking to profit from an economy with “promising economic trajectory.”

Global X MSCI Vietnam ETF (VNAM), listed December 9, on the New York Stock Exchange Arca last year, focuses on blue chip stocks in real estate, financials and consumer staples.

The fund has increased its assets from around $1 million when first established to $8.63 million now, with the top holding as of last month being HPG of steelmaker Hoa Phat Group, at 10.92 percent of its net assets.

Other tickers it has bet on are VHM of real estate giant Vinhomes, at 8.41 percent of net assets, VIC of biggest private conglomerate Vingroup, 7.31 percent, and MSN of conglomerate Masan Group, 6.43 percent.

The fund, managed by a unit of South Korean financial group Mirae Asset, sees long-term growth potential in Vietnam and pegs GDP growth figure for the country at 6 percent annually from 2022 to 2025.

"Vietnam’s promising economic trajectory leads commentators to often compare it to China or the Four Asian Tigers (South Korea, Singapore, Taiwan and Hong Kong), implying that the country could continue to emerge as a regional, if not global, powerhouse," said fund manager Dillon Jaghory in a note on its website.

The increasing investments by VNAM stirs hope that more foreign investors would return to Vietnam’s stock markets this year after net selling a record VND62.36 trillion ($2.75 billion) worth of local shares last year.

The fact that there is still room for foreign ownership in blue chip stocks and exchange-traded funds put in a good performance last year could persuade foreigners to come back to Vietnam’s stock markets, James Estaugh, head of securities services at HSBC Vietnam, said in a note last month.

Foreigners have started to net buy again in the first weeks this year, and more could be considering rejoining Vietnam markets as the country is poised to attain Emerging Market status over the next several years, he added.

Another factor that is set to drive Vietnam’s market up is the continued rise in the number of new local retail investors, which reached a record high of 1.53 million last year, bringing the ratio of the population investing in stocks to 4.4 percent.

"Many foreign funds are betting on Vietnam as it is becoming more accessible and people’s incomes are rising," said Tran Thien Phuoc, CEO of stock investment app Anfin.